Congress, Baseline Budgeting, and Fraud

Today's lesson is a short excursion into the dismal science and black art of congressional budgeting and why there was not a single stimulus, but multiple "stimuli" passed since 2007 -- which account for most of our yearly $1.4 trillion spending deficit.

In 1974, a Democrat-dominated Congress in the throes of Watergate passed the Congressional Budget Act of 1974. Among other things, the act established the Congressional Budget Office and codified the notion of baseline budgeting. A budgetary baseline increases about 6% per year. Any expenditure less than that 6% yearly increase is portrayed as a budget cut by Democrats and their media lackeys.

One of the games played by Democrats under this law is the passage of stimulus bills. When a stimulus is passed, it adds immediately to the budget baseline for that year and then for every succeeding year. So the Obama-Pelosi-Reid stimulus passed in 2009 added $787 billion of new spending to the federal budget in 2009. It then went on to add $834 billion of new spending in 2010 ($787 billion times 1.06 for the 6% yearly increase); $884 billion in 2011; and finally $937 billion in 2012. Over the last four years, this totals $3,442 billion more than would have been budgeted through the normal process -- which is precisely why the Democrats wanted it passed as a stimulus.

Since Harry Reid's Democratic majority in the Senate has consistently refused to pass a budget for nearly three years, the continuing resolutions have simply maintained the yearly automatic 6% increase in spending, leading to the enormous budget deficits of the Obama years.

Interestingly enough, the 2009 Obama stimulus was not the first stimulus passed by the Reid- Pelosi congresses. They passed a $152 billion stimulus in 2007 when the democrats retook majorities in the House and the Senate. Another $146 billion stimulus passed in 2008. President Bush signed both of them. The 2007 stimulus added $1,060 billion and the 2008 stimulus added $823 billion of new spending through 2012.

Add the three totals together and you end up with $5,326 billion of new spending based simply on adding a new stimulus to the yearly budget baseline and never removing them. That $5,326 billion ($5.3 trillion) represents the entirety of the new deficit spending under the Obama administration which has not had one of their budgets passed since 2009.

So what do we learn from all of this? First is that the Democrats are bloody good at deception and fraud. Second is that when any congress-critter starts talking about an economic stimulus, we taxpayers ought to start looking for the tar and feathers. Third is that the budgetary process in Congress is badly broken and completely deceptive. Finally, the Congressional Budget Act of 1974 must be repealed in its entirety and replaced with a budget process that mirrors what business and/or households use: one that holds a budgetary baseline at zero with no increase so that a real increase is properly flagged and a real decrease is properly identified. Anything else is a fraud upon the taxpayer and should be treated appropriately.

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